The Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) have agreed to finance two-thirds of Nepal's 140-MW Tanahun hydropower project.
Both JICA and the ADB said they will provide $150 million each after negotiations lasting through this past week. The JICA loan will carry a .01% interest with a 40 year payback period, while the ADB loan with a 1.5% interest rate over 30 years.
Official loan documents have not yet been signed.
Sources report that the European Investment Bank (EIB) has expressed interest in financing at least part of the Tanahun project's remaining costs, though officials said negotiations have not taken place yet.
The run-of-river hydro project will be built on the Seti River and could be generating power by 2020, assuming its operator, Nepal Electricity Authority (NEA), can begin construction in 2014 as proposed.